Backgro nd and objective Background and objective Importance of - - PDF document

I nstitute for Global Environmental Strategies

Impact assessment of sustainable forest use in Indonesia: A dynamic CGE approach

Satoshi Kojim a

Di t E d E i t G Director, Econom y and Environm ent Group I nstitute for Global Environm ental Strategies ( I GES) TEEB Sessions at Nagoya: National policy findings and options, 2 1 October 2 0 1 0 , Nagoya Congress Center

Backgro nd and objective Background and objective

I t f t i bl f t i

 Importance of sustainable use of ecosystem services

 Global environmental issues (biodiversity, climate change) are

problems of sustainable use of ecosystem services problems of sustainable use of ecosystem services.

 Assessment of policy impacts on economy and environment is

helpful to formulate and implement policies promoting sustainable use of ecosystem services.

 Quantitative policy impact assessment is common for climate

policy but not for sustainable use of ecosystem services policy, but not for sustainable use of ecosystem services.

 Research objective

 Develop quantitative assessment tool,

and conduct impact assessment of sustainable forest use policy in Indonesia

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sustainable forest use policy in Indonesia.

Methodolog Methodology

C bi ti f l i l d l (f t t k d l) d

 Combination of ecological model (forest stock model) and

economic model (dynamic CGE model)

 Forest stock model describes forest use scenarios: BAU (business-  Forest stock model describes forest use scenarios: BAU (business-

as-usual) scenario and SFU(sustainable forest use) scenario.

 Dynamic CGE (computable general equilibrium) model simulates

economic consequences of BAU and SFU scenarios. The differences between BAU and SFU are policy impacts of SFU.

S i tti

 Scenario setting

 BAU: Annual logging volume follows current trend (reduce 1.6%

per year) ⇒ Forest stock will drastically reduce in 10 years per year). ⇒ Forest stock will drastically reduce in 10 years.

 SFU: ① Reduce logging volume such that forest stock will be

maintained, ② afforestation, ③ revenue from REDD (reducing

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emissions from deforestation and forest degradation) credit ($4/t).

Scenarios

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Scenarios

3

400 500 600

Logging volume (million m3)

2.50 3.00 3.50

Unit logging cost (BAU in 2004 = 1)

BAU SFU 100 200 300 400 BAU SFU 1.00 1.50 2.00 BAU SFU

F t t k ( illi

3)

100 2004 2006 2008 2010 2012 2014

F (1000 h )

0.00 0.50 2004 2006 2008 2010 2012 2014 4,000 5,000 6,000

Forest stock (million m3)

80,000 100,000 120,000

Forest area (1000 ha)

1 000 2,000 3,000 , BAU SFU 20,000 40,000 60,000 , BAU SFU

4

1,000 2004 2006 2008 2010 2012 2014 20,000 2004 2006 2008 2010 2012 2014

Sim lation res lts Simulation results

Social welfare impact (EV: $ per person) Impact on real GDP

20 2004 2006 2008 2010 2012 2014

Social welfare impact (EV: $ per person)

‐1.0% 0.0% 2004 2006 2008 2010 2012 2014

Impact on real GDP

‐60 ‐40 ‐20 2004 2006 2008 2010 2012 2014 Net present value of EV: $ ‐4.0% ‐3.0% ‐2.0% ‐80 60 $ - 57.5 per person ‐5.0% 4.0% 4100

Household assets ($ per person)

1200

Household income ($ per person)

3900 4000 4100 BAU SFU 1000 1100 1200 BAU SFU 3700 3800 700 800 900

5

2004 2006 2008 2010 2012 2014 2004 2006 2008 2010 2012 2014

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Concl sions Conclusions

C t ib ti f thi t d

 Contribution of this study

 We developed an assessment tool of sustainable ecosystem service

use policy use policy.

 We introduced key elements of sustainable ecosystem service use,

e.g. sustainable yield (or stock), cost implications of sustainable use, problems of unsustainable ecosystem use.

 This tool can estimate the value of ecosystem services that makes

sustainable use policy beneficial to social welfare If WTP for forest sustainable use policy beneficial to social welfare. If WTP for forest stock > 0.21 $/m3 /yr (or 9.3 $/ha/yr), positive social welfare impacts.

 Future tasks

 Elaboration of SFU policy setting  Elaboration of scenarios and parameter values

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